BBB Tips for Handling Debt Collectors
Consumers who owe money or are behind on their bills may be legitimately contacted by debt collectors to pay off debts.
In a recent release of the top complaints reported to BBB, collection agencies ranked fifth in number of complaints received. With more than 15,000 complaints, consumers need to be aware of the best practices for when it comes to handling debt collectors.
Be wary of the red flags for fraudulent debt collectors. Refusing to reveal the name of their agency or demands that the payments be made in cash or money transfer only, could mean that a phony debt collector is making an attempt at identity theft.
It's important for consumers to verify the alleged debt before taking action. BBB recommends doing the following:
Request written proof.
By law, a debt collection agency must provide a validation notice within five days of contacting you about the debt. Within 30 days of receiving their validation notice, send the debt collector a written request to further verify the debt details. Do not provide personal or financial information unless the validity of the debt and the debt collector has been confirmed.
Verify the legitimacy.
Get the debt collector's name and contact information to research the agency. Check the company's track record on www.bbb.org
. Verify that the representative who called is affiliated with the agency.
If you do not owe the alleged debt, BBB recommends:
Do not make a payment on a bill just to make the collector "go away." Even just one payment can indicate that you are accepting the full responsibility of the debt, and it could also reflect as a liability on your credit report.
If no debt is confirmed, contact any involved parties to clear up inaccuracies on your credit report. Write a detailed letter and include supporting documents to prove your case.
Check for identity theft.
If contacted by a collection agency regarding erroneous bills or debts, it could be an indication of identity theft. Review your credit report to quickly identify fraudulent activity or make corrections; visit www.annualcreditreport.com
for a free yearly credit report.
BBB recommends doing the following for debt you do owe:
Know your responsibilities.
It is not against the law for a debt collector or creditor to contact you regarding unpaid debts. Try working with them to resolve issues.
Complain about abusive practices.
File a BBB complaint if you believe a debt collector is acting unethically.
Stop collector calls.
According to federal law, a debt collector cannot continue to contact you -- at work or home -- if you tell them to stop. Write a letter stating not to contact you anymore. Save a copy of the letter then send the original via certified mail and request a return receipt. If a debt is owed, the collector or creditor can still take legal action to collect funds and may contact you to inform you of their action.
Know your rights. Debt collectors:
May not make false or deceptive claims.
Are not allowed to make idle threats, express or implied, or use abusive or profane language.
Should not discuss consumers' accounts with unauthorized third parties.
May not inaccurately report credit information and pressure consumers to pay debts they do not owe.
Must investigate the validity of a dispute over a debt.
For more consumer tips, go to www.bbb.org
. To report a fraud or scam, call the BBB Hotline at 903-581-8373.